Macquarie Infrastructure Corp - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - October 17, 2018

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Exhibit 99.1​
MACQUARIE INFRASTRUCTURE CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma consolidated condensed statements of operations for the six months ended June 30, 2018 and for the fiscal year ended December 31, 2017 is presented as though the sale of the Bayonne Energy Center power generation facility (“BEC”) had occurred as of the beginning of the earliest period presented. The following unaudited pro forma consolidated condensed balance sheet as of June 30, 2018 is presented as though the sale of BEC had occurred on June 30, 2018. Pro forma adjustments are described in the accompanying notes to the unaudited pro forma financial information and are based upon the historical financial statements of MIC and information available at the time of preparation and reflect certain assumptions that MIC believes are reasonable under the circumstances. Accordingly, the pro forma adjustments reflected in the unaudited pro forma financial information are preliminary and subject to revision and the actual amounts ultimately reported could differ from these estimates. The unaudited pro forma financial information is for informational purposes only and is not necessarily indicative of the operating results or financial position that would be achieved had MIC’s sale of BEC been consummated on the dates indicated and should not be construed as being representative of MIC’s future results of operations or financial position.
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MACQUARIE INFRASTRUCTURE CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
($ in Thousands, Except Share Data)
​ ​ ​
As of June 30, 2018
​
​ ​ ​
As Reported
​ ​
Pro Forma
Adjustments
​ ​
Pro Forma
​
ASSETS
 ​ ​ ​ ​
Current assets: ​ ​ ​ ​
Cash and cash equivalents
​ ​ ​ $ 53,976 ​ ​ ​ ​ $ 649,674(a) ​ ​ ​ ​ $ 703,650 ​ ​
Restricted cash
​ ​ ​ ​ 27,509 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 27,509 ​ ​
Accounts receivable, net
​ ​ ​ ​ 128,629 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 128,629 ​ ​
Inventories
​ ​ ​ ​ 31,495 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 31,495 ​ ​
Prepaid expenses
​ ​ ​ ​ 10,073 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 10,073 ​ ​
Fair value of derivative instruments
​ ​ ​ ​ 15,893 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 15,893 ​ ​
Other current assets
​ ​ ​ ​ 14,261 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 14,261 ​ ​
Assets held for sale
​ ​ ​ ​ 951,982 ​ ​ ​ ​ ​ (951,982)(b) ​ ​ ​ ​ ​ — ​ ​
Total current assets
​ ​ ​ ​ 1,233,818 ​ ​ ​ ​ ​ (302,308) ​ ​ ​ ​ ​ 931,510 ​ ​
Property, equipment, land and leasehold improvements, net
​ ​ ​ ​ 3,760,023 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 3,760,023 ​ ​
Investment in unconsolidated business
​ ​ ​ ​ 9,073 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 9,073 ​ ​
Goodwill
​ ​ ​ ​ 2,046,896 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,046,896 ​ ​
Intangible assets, net
​ ​ ​ ​ 833,325 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 833,325 ​ ​
Fair value of derivative instruments
​ ​ ​ ​ 26,652 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 26,652 ​ ​
Other noncurrent assets
​ ​ ​ ​ 26,527 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 26,527 ​ ​
Total assets
​ ​ ​ $ 7,936,314 ​ ​ ​ ​ $ (302,308) ​ ​ ​ ​ $ 7,634,006 ​ ​
LIABILITIES AND STOCKHOLDERS’ EQUITY
 ​ ​ ​ ​
Current liabilities: ​ ​ ​ ​
Due to Manager – related party
​ ​ ​ $ 7,435 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 7,435 ​ ​
Accounts payable
​ ​ ​ ​ 42,187 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 42,187 ​ ​
Accrued expenses
​ ​ ​ ​ 71,293 ​ ​ ​ ​ ​ (1,145)(c) ​ ​ ​ ​ ​ 70,148 ​ ​
Current portion of long-term debt
​ ​ ​ ​ 42,676 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 42,676 ​ ​
Fair value of derivative instruments
​ ​ ​ ​ 730 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 730 ​ ​
Other current liabilities
​ ​ ​ ​ 39,709 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 39,709 ​ ​
Liabilities held for sale
​ ​ ​ ​ 307,149 ​ ​ ​ ​ ​ (307,149)(b) ​ ​ ​ ​ ​ — ​ ​
Total current liabilities
​ ​ ​ ​ 511,179 ​ ​ ​ ​ ​ (308,294) ​ ​ ​ ​ ​ 202,885 ​ ​
Long-term debt, net of current portion
​ ​ ​ ​ 3,342,260 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 3,342,260 ​ ​
Deferred income taxes
​ ​ ​ ​ 651,080 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 651,080 ​ ​
Fair value of derivative instruments
​ ​ ​ ​ 1,705 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,705 ​ ​
Other noncurrent liabilities
​ ​ ​ ​ 186,020 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 186,020 ​ ​
Total liabilities
​ ​ ​ ​ 4,692,244 ​ ​ ​ ​ ​ (308,294) ​ ​ ​ ​ ​ 4,383,950 ​ ​
Commitments and contingencies
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Stockholders’ equity: ​ ​ ​ ​
Common stock ($0.001 par value; 500,000,000 authorized; 85,186,385
shares issued and outstanding at June 30, 2018)
​ ​ ​ $ 85 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 85 ​ ​
Additional paid in capital
​ ​ ​ ​ 1,655,367 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,655,367 ​ ​
Accumulated other comprehensive loss
​ ​ ​ ​ (33,466) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (33,466) ​ ​
Retained earnings
​ ​ ​ ​ 1,458,767 ​ ​ ​ ​ ​ 5,986(d) ​ ​ ​ ​ ​ 1,464,753 ​ ​
Total stockholders’ equity
​ ​ ​ ​ 3,080,753 ​ ​ ​ ​ ​ 5,986 ​ ​ ​ ​ ​ 3,086,739 ​ ​
Noncontrolling interests
​ ​ ​ ​ 163,317 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 163,317 ​ ​
Total equity
​ ​ ​ ​ 3,244,070 ​ ​ ​ ​ ​ 5,986 ​ ​ ​ ​ ​ 3,250,056 ​ ​
Total liabilities and equity
​ ​ ​ $ 7,936,314 ​ ​ ​ ​ $ (302,308) ​ ​ ​ ​ $ 7,634,006 ​ ​
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See accompanying notes to the Unaudited Pro Forma Consolidated Condensed Financial Statements.
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MACQUARIE INFRASTRUCTURE CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
($ in Thousands, Except Share and Per Share Data)
​ ​ ​
Six Months Ended June 30, 2018
​
​ ​ ​
As Reported
​ ​
Pro Forma
Adjustments
​ ​
Pro Forma
​
Revenue ​ ​ ​ ​
Service revenue
​ ​ ​ $ 778,606 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 778,606 ​ ​
Product revenue
​ ​ ​ ​ 201,030 ​ ​ ​ ​ ​ (39,974)(e) ​ ​ ​ ​ ​ 161,056 ​ ​
Total revenue
​ ​ ​ ​ 979,636 ​ ​ ​ ​ ​ (39,974) ​ ​ ​ ​ ​ 939,662 ​ ​
Costs and expenses ​ ​ ​ ​
Cost of services
​ ​ ​ ​ 367,195 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 367,195 ​ ​
Cost of product sales
​ ​ ​ ​ 100,549 ​ ​ ​ ​ ​ (6,128)(e) ​ ​ ​ ​ ​ 94,421 ​ ​
Selling, general and administrative
​ ​ ​ ​ 175,884 ​ ​ ​ ​ ​ (9,255)(e) ​ ​ ​ ​ ​ 166,629 ​ ​
Fees to Manager – related party
​ ​ ​ ​ 23,780 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 23,780 ​ ​
Depreciation
​ ​ ​ ​ 122,444 ​ ​ ​ ​ ​ (12,156)(e) ​ ​ ​ ​ ​ 110,288 ​ ​
Amortization of intangibles
​ ​ ​ ​ 35,440 ​ ​ ​ ​ ​ (1,856)(e) ​ ​ ​ ​ ​ 33,584 ​ ​
Total operating expenses
​ ​ ​ ​ 825,292 ​ ​ ​ ​ ​ (29,395) ​ ​ ​ ​ ​ 795,897 ​ ​
Operating income
​ ​ ​ ​ 154,344 ​ ​ ​ ​ ​ (10,579) ​ ​ ​ ​ ​ 143,765 ​ ​
Other income (expense) ​ ​ ​ ​
Interest income
​ ​ ​ ​ 191 ​ ​ ​ ​ ​ (32)(e) ​ ​ ​ ​ ​ 159 ​ ​
Interest expense
​ ​ ​ ​ (49,077) ​ ​ ​ ​ ​ 1,767(e) ​ ​ ​ ​ ​ (47,310) ​ ​
Other income, net
​ ​ ​ ​ 6,290 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 6,290 ​ ​
Net income before income taxes
​ ​ ​ ​ 111,748 ​ ​ ​ ​ ​ (8,844) ​ ​ ​ ​ ​ 102,904 ​ ​
Provision for income taxes
​ ​ ​ ​ (28,674) ​ ​ ​ ​ ​ 3,095(f) ​ ​ ​ ​ ​ (25,579) ​ ​
Net income
​ ​ ​ ​ 83,074 ​ ​ ​ ​ ​ (5,749) ​ ​ ​ ​ ​ 77,325 ​ ​
Less: net loss attributable to noncontrolling interests
​ ​ ​ ​ (32,126) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (32,126) ​ ​
Net income attributable to MIC
​ ​ ​ $ 115,200 ​ ​ ​ ​ $ (5,749) ​ ​ ​ ​ $ 109,451 ​ ​
Basic income per share attributable to MIC
​ ​ ​ $ 1.36 ​ ​ ​ ​ $ (0.07) ​ ​ ​ ​ $ 1.29 ​ ​
Weighted average number of shares outstanding: basic
​ ​ ​ ​ 84,952,551 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 84,952,551 ​ ​
Diluted income per share attributable to MIC
​ ​ ​ $ 1.34 ​ ​ ​ ​ $ (0.06) ​ ​ ​ ​ $ 1.28 ​ ​
Weighted average number of shares outstanding: diluted
​ ​ ​ ​ 89,316,951 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 89,316,951 ​ ​
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See accompanying notes to the Unaudited Pro Forma Consolidated Condensed Financial Statements.
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MACQUARIE INFRASTRUCTURE CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
($ in Thousands, Except Share and Per Share Data)
​ ​ ​
Year Ended December 31, 2017
​
​ ​ ​
As Reported
​ ​
Pro Forma
Adjustments
​ ​
Pro Forma
​
Revenue ​ ​ ​ ​
Service revenue
​ ​ ​ $ 1,445,832 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 1,445,832 ​ ​
Product revenue
​ ​ ​ ​ 368,881 ​ ​ ​ ​ ​ (78,314)(e) ​ ​ ​ ​ ​ 290,567 ​ ​
Total revenue
​ ​ ​ ​ 1,814,713 ​ ​ ​ ​ ​ (78,314) ​ ​ ​ ​ ​ 1,736,399 ​ ​
Costs and expenses ​ ​ ​ ​
Cost of services
​ ​ ​ ​ 624,214 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 624,214 ​ ​
Cost of product sales
​ ​ ​ ​ 164,311 ​ ​ ​ ​ ​ (8,628)(e) ​ ​ ​ ​ ​ 155,683 ​ ​
Selling, general and administrative
​ ​ ​ ​ 331,345 ​ ​ ​ ​ ​ (16,123)(e) ​ ​ ​ ​ ​ 315,222 ​ ​
Fees to Manager – related party
​ ​ ​ ​ 71,388 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 71,388 ​ ​
Depreciation
​ ​ ​ ​ 234,164 ​ ​ ​ ​ ​ (21,841)(e) ​ ​ ​ ​ ​ 212,323 ​ ​
Amortization of intangibles
​ ​ ​ ​ 68,253 ​ ​ ​ ​ ​ (3,713)(e) ​ ​ ​ ​ ​ 64,540 ​ ​
Total operating expenses
​ ​ ​ ​ 1,493,675 ​ ​ ​ ​ ​ (50,305) ​ ​ ​ ​ ​ 1,443,370 ​ ​
Operating income
​ ​ ​ ​ 321,038 ​ ​ ​ ​ ​ (28,009) ​ ​ ​ ​ ​ 293,029 ​ ​
Other income (expense) ​ ​ ​ ​
Interest income
​ ​ ​ ​ 199 ​ ​ ​ ​ ​ (43)(e) ​ ​ ​ ​ ​ 156 ​ ​
Interest expense
​ ​ ​ ​ (110,602) ​ ​ ​ ​ ​ 8,825(e) ​ ​ ​ ​ ​ (101,777) ​ ​
Other income, net
​ ​ ​ ​ 11,323 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 11,323 ​ ​
Net income before income taxes
​ ​ ​ ​ 221,958 ​ ​ ​ ​ ​ (19,227) ​ ​ ​ ​ ​ 202,731 ​ ​
Benefit for income taxes
​ ​ ​ ​ 234,154 ​ ​ ​ ​ ​ 8,652(f) ​ ​ ​ ​ ​ 242,806 ​ ​
Net income
​ ​ ​ ​ 456,112 ​ ​ ​ ​ ​ (10,575) ​ ​ ​ ​ ​ 445,537 ​ ​
Less: net income attributable to noncontrolling interests
​ ​ ​ ​ 4,910 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,910 ​ ​
Net income attributable to MIC
​ ​ ​ $ 451,202 ​ ​ ​ ​ $ (10,575) ​ ​ ​ ​ $ 440,627 ​ ​
Basic income per share attributable to MIC
​ ​ ​ $ 5.42 ​ ​ ​ ​ $ (0.12) ​ ​ ​ ​ $ 5.30 ​ ​
Weighted average number of shares outstanding: basic
​ ​ ​ ​ 83,204,404 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 83,204,404 ​ ​
Diluted income per share attributable to MIC
​ ​ ​ $ 5.13 ​ ​ ​ ​ $ (0.12) ​ ​ ​ ​ $ 5.01 ​ ​
Weighted average number of shares outstanding: diluted
​ ​ ​ ​ 91,073,362 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 91,073,362 ​ ​
​
See accompanying notes to the Unaudited Pro Forma Consolidated Condensed Financial Statements.
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Notes to Unaudited Pro Forma Consolidated Condensed Financial Statements
1.   Basis of Presentation
The unaudited pro forma consolidated condensed financial information presented here is based on the historical consolidated financial statements of the Company. The unaudited pro forma consolidated condensed balance sheet assumes the sale of BEC was consummated as of June 30, 2018. The unaudited pro forma consolidated condensed statements of operations for the six months ended June 30, 2018 and the fiscal year ended December 31, 2017 assume the sale of BEC was consummated as of the beginning of the earliest period presented.
2.   Unaudited Pro Forma Consolidated Condensed Balance Sheet Information
The following adjustments to the consolidated condensed balance sheet as of June 30, 2018, reflect the sale of BEC, net of purchase price adjustments and transaction costs, as though the sale occurred on June 30, 2018.
(a)
BEC sales price of  $900.0 million, net of outstanding debt balance of  $243.5 million, purchase price adjustments and transaction costs.
​
(b)
To eliminate assets and liabilities of BEC classified as held for sale at June 30, 2018 as reported in the Company’s financial statements for the quarter then ended.
​
(c)
Reversal of transaction costs incurred through the six months ended June 30, 2018.
​
(d)
Preliminary estimated pre-tax gain.
​
3.   Unaudited Pro Forma Consolidated Condensed Statements of Operations
The unaudited pro forma consolidated condensed statements of operations for the six months ended June 30, 2018 and for the fiscal year ended December 31, 2017 include adjustments made to historical financial information of the Company assuming that the sale of BEC was consummated on January 1, 2018 for the six months ended June 30, 2018 and on January 1, 2017 for the fiscal year ended December 31, 2017. These adjustments reflect the elimination of the results of operations of BEC as a result of the transaction. The unaudited pro forma consolidated condensed financial statements does not include the impact of any estimated pre-tax gain or transaction costs from the sale of BEC in any of the periods presented.
(e)
To eliminate BEC’s results of operations for the period. For the six months ended June 30, 2018, the pro forma adjustments also includes $1.1 million of transaction costs in selling, general and administrative expenses. See “(c)” above.
​
(f)
Pro forma adjustments impact using an estimated effective tax rate of 35.0% and 45.0% for the six months ended June 30, 2018 and for the fiscal year ended December 31, 2017, respectively.
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Macquarie Infrastructure Corp Reports